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The Housing Stock, Housing Prices, and User Costs: The Roles of Location, Structure, and Unobserved Quality

Halket, J; Nesheim, L; Oswald, F; (2020) The Housing Stock, Housing Prices, and User Costs: The Roles of Location, Structure, and Unobserved Quality. International Economic Review , 61 (4) pp. 1777-1814. 10.1111/iere.12475. Green open access

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Abstract

Which housing characteristics are important for understanding homeownership rates? How are housing characteristics priced in rental and owner‐occupied markets? What can answers to these questions tell us about economic theories of homeownership? Using the English Housing Survey, we estimate a selection model of property allocations to the owner‐occupied and rental sectors. Structural characteristics and unobserved quality are important for selection. Location is not. Accounting for selection is important for rent‐to‐price ratio estimates and explains some puzzling correlations between rent‐to‐price ratios and homeownership rates. These patterns are consistent with, among others, hypotheses of rental market contracting frictions related to housing maintenance.

Type: Article
Title: The Housing Stock, Housing Prices, and User Costs: The Roles of Location, Structure, and Unobserved Quality
Open access status: An open access version is available from UCL Discovery
DOI: 10.1111/iere.12475
Publisher version: https://doi.org/10.1111/iere.12475
Language: English
Additional information: This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/10100477
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